British Columbia Committee Hansard (Blues) — 10 July 2020, p.m., Issue 7 (41st Parliament, 5th Session) (20200710am CommitteeC n7)

20200710am CommitteeC n7

British Columbia — Debates (Hansard)

Fifth Session, 41st Parliament REPORT OF PROCEEDINGS (HANSARD) COMMITTEE OF SUPPLY ,

SECTION C Virtual Meeting Friday, July 10, 2020 Morning Meeting Issue No. 7 Presiding Officers: RAJ CHOUHAN, DEPUTY SPEAKER SPENCER CHANDRA HERBERT, DEPUTY CHAIR, COMMITTEE OF THE WHOLE ISSN 2563-352X

PROVINCE OF BRITISH COLUMBIA (Entered Confederation July 20, 1871) LIEUTENANT-GOVERNOR Her Honour the Honourable Janet Austin, OBC Fifth Session, 41st Parliament SPEAKER OF THE LEGISLATIVE ASSEMBLY Honourable Darryl Plecas EXECUTIVE COUNCIL Premier and President of the Executive Council ............................................................................................................... Hon. John Horgan Deputy Premier and Minister of Finance............................................................................................................................Hon.

Carole James Minister of Advanced Education, Skills and Training..................................................................................................... Hon. Melanie Mark Minister of Agriculture.........................................................................................................................................................Hon. Lana Popham Attorney General.................................................................................................................................................................Hon.

David Eby, QC Minister of Children and Family Development ............................................................................................................ Hon. Katrine Conroy Minister of State for Child Care...................................................................................................................................... Hon. Katrina Chen Minister of Citizens’ Services...................................................................................................................................................Hon.

Anne Kang Minister of Education ............................................................................................................................................................ Hon. Rob Fleming Minister of Energy, Mines and Petroleum Resources ..................................................................................................... Hon. Bruce Ralston Minister of Environment and Climate Change Strategy............................................................................................. Hon.

George Heyman Minister of Forests, Lands, Natural Resource Operations and Rural Development ..............................................Hon. Doug Donaldson Minister of Health .....................................................................................................................................................................Hon. Adrian Dix Minister of Indigenous Relations and Reconciliation ......................................................................................................... Hon.

Scott Fraser Minister of Jobs, Economic Development and Competitiveness.............................................................................Hon. Michelle Mungall Minister of State for Trade...............................................................................................................................................Hon. George Chow Minister of Labour ...................................................................................................................................................................Hon.

Harry Bains Minister of Mental Health and Addictions............................................................................................................................ Hon. Judy Darcy Minister of Municipal Affairs and Housing.................................................................................................................. Hon. Selina Robinson Minister of Public Safety and Solicitor General ........................................................................................................... Hon.

Mike Farnworth Minister of Social Development and Poverty Reduction..............................................................................................Hon. Shane Simpson Minister of Tourism, Arts and Culture.....................................................................................................................................Hon. Lisa Beare Minister of Transportation and Infrastructure................................................................................................................ Hon.

Claire Trevena LEGISLATIVE ASSEMBLY Leader of the Official Opposition................................................................................................................................Andrew Wilkinson, QC Leader of the Third Party .................................................................................................................................................................Adam Olsen Deputy Speaker................................................................................................................................................................................

Raj Chouhan Assistant Deputy Speaker............................................................................................................................................................. Simon Gibson Deputy Chair, Committee of the Whole ................................................................................................................ Spencer Chandra Herbert Clerk of the Legislative Assembly ...........................................................................................................................................

Kate Ryan-Lloyd Law Clerk and Parliamentary Counsel.............................................................................................................................. Seunghee Suzie Seo Clerk Assistant, Parliamentary Services...........................................................................................................................

Artour Sogomonian Clerk Assistant, Committees and Interparliamentary Relations ..............................................................................................Susan Sourial Senior Research Analyst ................................................................................................................................................................. Jennifer Arril Senior Research Analyst ...................................................................................................................................................................

Karan Riarh Acting Sergeant-at-Arms..................................................................................................................................................................Greg Nelson

ALPHABETICAL LIST OF MEMBERS Ashton, Dan (BC Liberal) ......................................................................... Penticton Bains, Hon. Harry (NDP)................................................................ Surrey-Newton Barnett, Donna (BC Liberal) .....................................................Cariboo-Chilcotin Beare, Hon. Lisa (NDP)..............................................

Maple Ridge–Pitt Meadows Begg, Garry (NDP) .......................................................................Surrey-Guildford Bernier, Mike (BC Liberal) .........................................................Peace River South Bond, Shirley (BC Liberal)...........................................Prince George–Valemount Brar, Jagrup (NDP).......................................................................Surrey-Fleetwood Cadieux, Stephanie (BC Liberal)........................................................

Surrey South Chandra Herbert, Spencer (NDP) .......................................Vancouver–West End Chen, Hon. Katrina (NDP)...................................................... Burnaby-Lougheed Chouhan, Raj (NDP) .................................................................Burnaby-Edmonds Chow, Hon. George (NDP).................................................Vancouver-Fraserview Clovechok, Doug (BC Liberal) ..................................Columbia River–Revelstoke Coleman, Rich (BC Liberal) ................................................................ Langley East Conroy, Hon.

Katrine (NDP)...........................................................Kootenay West Darcy, Hon. Judy (NDP) ............................................................. New Westminster Davies, Dan (BC Liberal) ........................................................... Peace River North de Jong, Michael, QC (BC Liberal) ..............................................Abbotsford West Dean, Mitzi (NDP)................................................................ Esquimalt-Metchosin D’Eith, Bob (NDP) ................................................................Maple Ridge–Mission Dix, Hon.

Adrian (NDP)....................................................... Vancouver-Kingsway Donaldson, Hon. Doug (NDP)...................................................................... Stikine Eby, Hon. David, QC (NDP).............................................. Vancouver–Point Grey Elmore, Mable (NDP).........................................................Vancouver-Kensington Farnworth, Hon. Mike (NDP) ........................................................Port Coquitlam Fleming, Hon. Rob (NDP) ......................................................

Victoria–Swan Lake Foster, Eric (BC Liberal).............................................................Vernon-Monashee Fraser, Hon. Scott (NDP) ..................................................Mid Island–Pacific Rim Furstenau, Sonia (BC Green Party) .............................................Cowichan Valley Gibson, Simon (BC Liberal) ...................................................Abbotsford-Mission Glumac, Rick (NDP).........................................................Port Moody–Coquitlam Heyman, Hon. George (NDP) ................................................Vancouver-Fairview Horgan, Hon.

John (NDP) ................................................ Langford–Juan de Fuca Hunt, Marvin (BC Liberal) ........................................................ Surrey-Cloverdale Isaacs, Joan (BC Liberal) .......................................... Coquitlam–Burke Mountain James, Hon. Carole (NDP).................................................... Victoria–Beacon Hill Johal, Jas (BC Liberal).................................................Richmond-Queensborough Kahlon, Ravi (NDP)............................................................................... Delta North Kang, Hon.

Anne (NDP)......................................................... Burnaby–Deer Lake Kyllo, Greg (BC Liberal)..............................................................................Shuswap Larson, Linda (BC Liberal) .............................................. Boundary-Similkameen Lee, Michael (BC Liberal) ........................................................Vancouver-Langara Leonard, Ronna-Rae (NDP) ..................................................... Courtenay-Comox Letnick, Norm (BC Liberal).............................................

Kelowna–Lake Country Ma, Bowinn (NDP) .....................................................North Vancouver–Lonsdale Malcolmson, Sheila (NDP) ........................................................................Nanaimo Mark, Hon. Melanie (NDP) .......................................Vancouver–Mount Pleasant Martin, John (BC Liberal)....................................................................... Chilliwack Milobar, Peter (BC Liberal)..................................... Kamloops–North Thompson Morris, Mike (BC Liberal) ........................................... Prince George–Mackenzie Mungall, Hon.

Michelle (NDP)......................................................Nelson-Creston Oakes, Coralee (BC Liberal) ............................................................ Cariboo North Olsen, Adam (BC Green Party)............................ Saanich North and the Islands Paton, Ian (BC Liberal).......................................................................... Delta South Plecas, Hon. Darryl (Ind.) ........................................................... Abbotsford South Polak, Mary (BC Liberal) ............................................................................. Langley Popham, Hon.

Lana (NDP)............................................................... Saanich South Ralston, Hon. Bruce (NDP) ............................................................Surrey-Whalley Redies, Tracy (BC Liberal) .......................................................Surrey–White Rock Reid, Linda (BC Liberal) ................................................. Richmond South Centre Rice, Jennifer (NDP) ............................................................................. North Coast Robinson, Hon.

Selina (NDP) .........................................Coquitlam-Maillardville Ross, Ellis (BC Liberal)................................................................................... Skeena Routledge, Janet (NDP) ....................................................................Burnaby North Routley, Doug (NDP) ................................................. Nanaimo–North Cowichan Rustad, John (BC Liberal) ................................................................Nechako Lakes Shypitka, Tom (BC Liberal) ..............................................................

Kootenay East Simons, Nicholas (NDP) ......................................... Powell River–Sunshine Coast Simpson, Hon. Shane (NDP)..................................................Vancouver-Hastings Sims, Jinny (NDP) ........................................................................ Surrey-Panorama Singh, Rachna (NDP) .........................................................Surrey–Green Timbers Stewart, Ben (BC Liberal) ................................................................. Kelowna West Stilwell, Michelle (BC Liberal)...............................................

Parksville-Qualicum Stone, Todd (BC Liberal)..........................................Kamloops–South Thompson Sturdy, Jordan (BC Liberal)........................................ West Vancouver–Sea to Sky Sullivan, Sam (BC Liberal)................................................ Vancouver–False Creek Sultan, Ralph (BC Liberal) ...........................................West Vancouver–Capilano Tegart, Jackie (BC Liberal) ................................................................. Fraser-Nicola Thomson, Steve (BC Liberal)......................................................

Kelowna-Mission Thornthwaite, Jane (BC Liberal) ...............................North Vancouver–Seymour Throness, Laurie (BC Liberal) .......................................................Chilliwack-Kent Trevena, Hon. Claire (NDP) ................................................................North Island Wat, Teresa (BC Liberal) ................................................. Richmond North Centre Weaver, Dr.

Andrew (Ind.)................................................Oak Bay–Gordon Head Wilkinson, Andrew, QC (BC Liberal) ................................Vancouver-Quilchena Y ap, John (BC Liberal)............................................................Richmond-Steveston LIST OF MEMBERS BY RIDING Abbotsford-Mission............................................................................Simon Gibson Abbotsford South....................................................................... Hon. Darryl Plecas Abbotsford West......................................................................

Michael de Jong, QC Boundary-Similkameen...................................................................... Linda Larson Burnaby–Deer Lake....................................................................... Hon. Anne Kang Burnaby-Edmonds................................................................................Raj Chouhan Burnaby-Lougheed .................................................................... Hon. Katrina Chen Burnaby North .................................................................................

Janet Routledge Cariboo-Chilcotin .............................................................................Donna Barnett Cariboo North.................................................................................... Coralee Oakes Chilliwack ............................................................................................... John Martin Chilliwack-Kent ...............................................................................Laurie Throness Columbia River–Revelstoke .........................................................

Doug Clovechok Coquitlam–Burke Mountain.................................................................. Joan Isaacs Coquitlam-Maillardville ...................................................... Hon. Selina Robinson Courtenay-Comox................................................................... Ronna-Rae Leonard Cowichan Valley .............................................................................

Sonia Furstenau Delta North.............................................................................................Ravi Kahlon Delta South ..................................................................................................Ian Paton Esquimalt-Metchosin ..............................................................................Mitzi Dean Fraser-Nicola .........................................................................................

Jackie Tegart Kamloops–North Thompson .............................................................Peter Milobar Kamloops–South Thompson..................................................................Todd Stone Kelowna–Lake Country .....................................................................Norm Letnick Kelowna-Mission ..............................................................................

Steve Thomson Kelowna West ..........................................................................................Ben Stewart Kootenay East.......................................................................................Tom Shypitka Kootenay West........................................................................ Hon. Katrine Conroy Langford–Juan de Fuca .............................................................. Hon. John Horgan Langley .....................................................................................................

Mary Polak Langley East.........................................................................................Rich Coleman Maple Ridge–Mission.............................................................................. Bob D’Eith Maple Ridge–Pitt Meadows............................................................Hon. Lisa Beare Mid Island–Pacific Rim................................................................ Hon. Scott Fraser Nanaimo......................................................................................

Sheila Malcolmson Nanaimo–North Cowichan............................................................... Doug Routley Nechako Lakes........................................................................................ John Rustad Nelson-Creston ................................................................... Hon. Michelle Mungall New Westminster........................................................................... Hon. Judy Darcy North Coast ...........................................................................................

Jennifer Rice North Island.............................................................................. Hon. Claire Trevena North Vancouver–Lonsdale................................................................... Bowinn Ma North Vancouver–Seymour........................................................Jane Thornthwaite Oak Bay–Gordon Head............................................................Dr.

Andrew Weaver Parksville-Qualicum.......................................................................Michelle Stilwell Peace River North ................................................................................... Dan Davies Peace River South ................................................................................ Mike Bernier Penticton ................................................................................................. Dan Ashton Port Coquitlam...................................................................... Hon.

Mike Farnworth Port Moody–Coquitlam.......................................................................Rick Glumac Powell River–Sunshine Coast....................................................... Nicholas Simons Prince George–Mackenzie....................................................................Mike Morris Prince George–Valemount ..................................................................

Shirley Bond Richmond North Centre..........................................................................Teresa Wat Richmond-Queensborough.........................................................................Jas Johal Richmond South Centre ......................................................................... Linda Reid Richmond-Steveston ...................................................................................

John Y ap Saanich North and the Islands .............................................................Adam Olsen Saanich South .............................................................................Hon. Lana Popham Shuswap...................................................................................................... Greg Kyllo Skeena........................................................................................................... Ellis Ross Stikine....................................................................................Hon.

Doug Donaldson Surrey-Cloverdale ................................................................................ Marvin Hunt Surrey-Fleetwood.....................................................................................Jagrup Brar Surrey–Green Timbers........................................................................Rachna Singh Surrey-Guildford......................................................................................Garry Begg Surrey-Newton ..............................................................................Hon.

Harry Bains Surrey-Panorama ...................................................................................... Jinny Sims Surrey South ................................................................................ Stephanie Cadieux Surrey-Whalley ......................................................................... Hon. Bruce Ralston Surrey–White Rock .............................................................................. Tracy Redies Vancouver-Fairview.............................................................. Hon.

George Heyman Vancouver–False Creek........................................................................ Sam Sullivan Vancouver-Fraserview...............................................................Hon. George Chow Vancouver-Hastings ............................................................... Hon. Shane Simpson Vancouver-Kensington....................................................................... Mable Elmore Vancouver-Kingsway..................................................................... Hon.

Adrian Dix Vancouver-Langara................................................................................ Michael Lee Vancouver–Mount Pleasant..................................................... Hon. Melanie Mark Vancouver–Point Grey ............................................................Hon.

David Eby, QC Vancouver-Quilchena........................................................Andrew Wilkinson, QC Vancouver–West End .....................................................Spencer Chandra Herbert Vernon-Monashee ....................................................................................Eric Foster Victoria–Beacon Hill.................................................................. Hon. Carole James Victoria–Swan Lake.................................................................... Hon. Rob Fleming West Vancouver–Capilano...................................................................

Ralph Sultan West Vancouver–Sea to Sky................................................................Jordan Sturdy Party Standings: BC Liberal 42; NDP 41; Independent 2; BC Green Party 2

CONTENTS Friday, July 10, 2020 Morning Meeting Page Committee of Supply Proceedings in

Section C.......................................................................................................................................................... 117 Estimates: Ministry of Energy, Mines and Petroleum Resources(continued) T. Shypitka Hon. B. Ralston S. Bond D. Barnett M. Bernier A. Olsen E. Ross C. Oakes D. Davies

FRIDAY , JULY 10, 2020 The committee met at 9:30 a.m. [S. Chandra Herbert in the chair.] Committee of Supply Proceedings in

Section C ESTIMATES: MINISTRY OF ENERGY , MINES AND PETROLEUM RESOURCES (continued) On Vote 22: ministry operations, $110,935,000 (continued). The Chair:Good morning, Members and Ministers. It’s good to be here with you this morning. Of course, we’re here for estimates for the Ministry of Energy, Mines and Petroleum Resources. Good morning, Minister. I’ d like to first acknowledge that those of us here in Vic- toria are on the traditional territories of the Songhees and the Esquimalt. I’m not in Vancouver. I’m in Victoria. I would, of course, thank them for having us here on their traditional territories.

Did the Minister have any remarks before we get to questions? Hon. B. Ralston:No, thank you. I gave those yesterday, Chair. This is a continuation from yesterday. The Chair:Thank you. I ask because sometimes there are answers to questions left outstanding that the minister wants to supply. Hon. B. Ralston:I appreciate the opportunity. Thank you. T. Shypitka:A new day. I’m looking forward to some good progress here this morning. Good morning, every- body. We’re going to get into oil and gas today, and a little bit of mining as well.

I’ll be bringing up our member for Prince George–Valemount as well as the member for Cari- boo-Chilcotin. First, I just wanted to quickly respond to the minister’s comments yesterday, at the end of the day, in regard to car- bon tax and the carbon tax structure in B.C. and how that is putting us behind competitively, globally, in the market- place.

I highlighted comments that were made from the Ernst and Y oung report in 2018, and how that fed into the Mining Jobs Task Force report that came out that same year, indicating that carbon tax was indeed the biggest factor that’s impeding our competitiveness as an industry, especially those that are energy-intensive and trade- exposed, the EITE industries. The minister’s response was somewhat dismissive. It’s not that big of a deal, the carbon tax structure. We’re branding ourselves as a clean industry. That’s where the world is going, and that’s where we’re going to get our best bang for our buck.

I agree that we need to be conscious of our energy out- puts and what we’re doing with the environment, but if we’re pricing ourselves out of the market, then we’re not getting those goods to the global marketplace. Then that leads into carbon leakage. That’s also illustrated in another report that I’ll be bringing up later. We’re not asking for the carbon tax to be reduced so much as it is to provide some backstops or some pro- tection like other jurisdictions have.

This can be done by making the CleanBC industrial incentive available for every dollar of the carbon tax — not just those above $30 a tonne but the whole thing, like other jurisdictions are doing. It currently applies to only the moneys above $30 a tonne. The other option, of course, is to join the federal government’s carbon plan and to make ourselves available to the output-based pricing system. [9:35 a.m.] These are some of the safeguards and protections that the B.C. government should be looking at. I think it’s important. I think the minister should recognize that.

I just wanted to ask the minister one more time if he thinks that the carbon tax and the structure that we have right now in B.C. are putting us behind the eight ball as far as getting our product to market globally. Hon. B. Ralston:I appreciate the member returning to this point. Let me just say that the…. We’ve talked about some of the recent investments in mining. Newmont Mining, a major Australian company, one of the biggest mining companies in the world, recently made an $805 million American investment in the Red Chris mine in the northwest. I’ve met with the members of the board and the CEO of Newmont.

They are very bullish on British Columbia. That’s why they’ve made that investment. They’re very much looking forward to working at the Red Chris mine. They see a bright future for that particular mine, and that’s why they’ve made that investment. The Ontario teachers pension fund made a $300 million American investment in New Gold, which is just outside the city boundaries of Kamloops. It’s a deal that gives them access to 48 percent of the revenue streams of the mine for four years and then an option to buy that percentage of the mine.

Obviously, Ontario teachers is one of the major pen- sion funds in the country. Again, an expression of confid- ence in mining in British Columbia. I met recently with the CEO of Artemis Gold, which is the Blackwater project south of Vanderhoof and west of Quesnel. They’ve made a commitment and recently raised about $200 million Canadian in capital. They have the 117

support and the further financial commitment of Ryan Beedie, who is a well-known philanthropist and business person in Vancouver. There’s a great deal of excitement in the sector about the prospect of this mine going forward. Obviously, there are some challenges there. There’s a power line that has to be built and some roads that have to be built. But it’s a project that will, again, be a major asset to contribute to jobs and prosperity in British Columbia. I think, in that sense, the market is speaking. [9:40 a.m.] The member seems to lack confidence in British Col- umbia and British Columbian mining.

These are major investors — mining companies — and they’re speaking. To that extent, I think the market has spoken, and the pro- spects for mining in British Columbia are very bright. T. Shypitka:Once again, let the record show that the minister did not address the issue of carbon tax structure at all in his response. He talks about opportunities. I’m glad there are opportunities. Thank God that there are opportunities in B.C. I am confident in the miners of Brit- ish Columbia. I just want them to have a fair shake. These questions I give to the minister aren’t from me. They’re from the industry.

They say it over and over again — that we’re getting further and further behind the eight ball. Now, we can’t control global demand. We can’t control interest rates or anything like that. But we can control our fiscal policy and our carbon tax structure, which the min- ister, once again, has refused to even acknowledge in his response. Not once did he say the word “carbon” or “car- bon tax” in his response again. He talks about great oppor- tunities, and I’m thankful for that. We’ll move on from there, and we’ll now bring up my colleague from Prince George–Valemount. Hon. B.

Ralston:I just wanted to make a correction. I said Newmont, and I meant Newcrest. I just want that to be clear for the record. S. Bond:Good morning. Thank you to the critic for giv- ing me just a couple of moments here. I’m wondering. There is a spot in the Rocky Mountain Trench which is ideally suited to geothermal energy, and there has been a long effort to bring a geothermal project to reality. It would be used to support a district heating system and, basically, replace predominantly wood heat, reduce particulate matter and create some pretty badly needed jobs in the Robson Valley.

Let’s begin with: is the minister aware of the geothermal potential and the project that has been under discussion for a long time near Valemount? Hon. B. Ralston:I want to thank the member for the question. Y es, the company is Borealis GeoPower. They have two geothermal permits at Canoe Reach on the Kin- basket reservoir. The original permit was acquired at auc- tion in October 2010. The former Minister of Energy, Mines and Petroleum Resources approved the renewal for a further year in December 2019. Borealis’s second permit was issued in November 2017, after an agreement by the LGIC.

Borealis drilled a single exploration well on the permit in the summer of 2019, with activity being overseen by the B.C. Oil and Gas Commission. What I’m advised is that the area is still considered an exploration prospect, and no geothermal resource has been confirmed at this time. S. Bond: Thank you very much to the minister. Of course, I’m aware of all of those details. I represent Valemount. This has been a project….

On November 7, 2017, the previous minister said: “We’re very supportive of this project. ” What I’m asking the minister is: is he an advocate and supporter of geothermal energy in British Columbia? There is an opportunity to leverage funding from the fed- eral government. In fact, we’ve seen other geothermal pro- jects seemingly move through the system much more rap- idly than the project in Valemount. [9:45 a.m.] To the minister, what effort is he making to move the geothermal industry ahead in British Columbia? It is an opportunity to create jobs. It is a green, clean techno- logy.

In fact, Valemount is not giving up on this project. It would be used to create a district heating system and reduce things like the use of wood heating and particu- late matter. I’m asking the minister: is he championing the geo- thermal energy potential in British Columbia, particu- larly with the federal government? And will he commit today to looking at how we can bring the project in Valemount? We’ve seen other projects across the province move forward. My final point. My colleagues, obviously, have a lot of questions, and the time is short. So I don’t need an answer that gives me the history.

I understand it well. I’ve been advocating for this project for years, as has the member for Oak Bay–Gordon Head and members of the Green Party. Here’s the challenge. Geothermal is currently regu- lated under the Oil and Gas Commission. That does not reflect the practice of geothermal energy or the geo- thermal sector. Is the minister going to champion projects like the Valemount project with the federal government to lever additional funding? Secondly, is he dealing with the fact that geothermal is currently regulated by the Oil and Gas Commission, which does not fit the needs of the sector? Hon. B.

Ralston:As a matter of policy, the government and the department support the development of geo- thermal resources. It’s a firm power source. In fact, the commission is working very closely with Chief Sharleen 118 Committee of Supply,

Section C Friday, July 10, 2020

Gale and the Fort Nelson band on the development of a geothermal project at Clark Lake. The commission is very proactive in dealing with pro- ponents, and in this particular project, it falls to the private sector and the company to engage in the exploration. One hole has been drilled, and we await the results of further activity. But there is nothing but enthusiastic support for geothermal heating as a practice. S. Bond: Well, thank you. I’ll wrap with this comment.

I know my colleagues are in line, and there are many more important questions as well. [9:50 a.m.] Enthusiastic support is fine when we talk about it in estimates every single time for years. It’s time for some action and support for the geothermal sector — dealing with the Oil and Gas Commission regulations, for example, and looking at a more appropriate regulatory sys- tem. I also know that my colleague from Skeena is working very hard on a project, a fantastic partnership, in Skeena.

This is an opportunity to create jobs in rural B.C., to look at a clean energy project and provide secure energy, for example, for district heating systems. I would hope that by the time we meet again in estimates that we will actually see the minister and the ministry step up and be aggressive advocates for geothermal. There is support available from the federal government, but the province has to be at the table. With those comments, I appreciate the time, thank the critic for it, and I look forward to having further conversa- tion with the minister about the project in Valemount. T.

Shypitka:We’ve got another member, from Cariboo- Chilcotin, who I would like to introduce now. The Chair:Needing no introduction, the member for Cariboo-Chilcotin. D. Barnett:My question is around the COVID-19 relief fund for residential customers through B.C. Hydro. I have read how the government and B.C. Hydro came to this decision, and I compliment the government on this decision. It has helped many people. Unfortu- nately, 2 percent, and only 2 percent — but it’s huge — do not qualify. My question is….

I have a constituent in the Cariboo- Chilcotin who has been displaced due to a land title issue, has no business, no income yet has his massive property that he has to continue to operate, has to continue to look after his asset in the hopes that someday he will receive some remuneration for it. His hydro bill is above the 2,500 kilowatts per month, so he has been rejected. I have tried through B.C. Hydro, and there is no appeal process. Is there nothing that can be done to help this type of a situation and people that may lose everything? Hon. B.

Ralston:What the MLA identifies as one of the criteria is accurate, but in this case, if the member can provide my office with the detail, I’ll ask the staff to invest- igate possibilities for her constituent. D. Barnett:Thank you. I will do that immediately. I know there is…. Y ou always have to have rules and reg- ulations, but in circumstances like this, I look forward to hearing back from you, as my constituent will. Thank you to the member for Kootenay East. T. Shypitka:We were thinking the Greens were going to be up at ten o’ clock. We’re a little bit early, actually. That’s good news.

We may have a question from Peace River South. The Chair:Looks like we do. Thank you, Member. M. Bernier:Good morning, Minister and everyone. It’s a pleasure to be on here. It’s unfortunate our time is so restricted and short. As the minister knows, in previous years, obviously, there are lots of questions under this min- istry. I’m going to probably just jump in quickly on a few things, but then later on this morning, maybe get a little bit deeper. [9:55 a.m.] My quick question. When we get back, Minister, I’ll try to make them quick and snappy.

Y ou might not even have to ask your staff, and we can have almost a conversation back and forth. My question to the minister right now, first of all, is…. The Premier has continually, multiple times, talked about CleanBC and how that’s going to be part of the recovery plan here in the province of British Columbia. Through that, though, in CleanBC, where I’m concerned….

I’ d like to hear the minister’s opinion — not his staff ’s, his opinion — on where he thinks the oil and gas sector fits in or if it’s going to be excluded as part of any economic recovery efforts if they’re going to be focusing completely around a CleanBC strategy. Can he let me know what he thinks and where that fits in? Hon. B. Ralston:I appreciate the question from the member. I’m pleased to be able to talk about the oil and gas sector. I have been meeting with representatives of the industry over the last few months on a fairly regular basis.

So I think the ministry and the government are aware of the challenges facing the sector. I think they are probably well known if not notorious, given the turbulence in the energy markets. Just dealing with the impact of COVID, in partnership with the government of Canada, which funded or provided $120 million, we created three new programs. [10:00 a.m.] Friday, July 10, 2020 Committee of Supply,

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I’m sure the member has probably heard the announce- ments in his riding to clean up dormant and orphaned well sites, primarily in the northeast — $100 million to dormant wells, which are those wells that have a connec- tion to an existing or operating company; and $15 million more for the orphaned well program, although there’s a separate levy which funds that program that was brought in by our government in 2018; an additional $15 million for orphan wells; and a fund called a legacy fund.

That would deal with the seismic lines that have been cut through the forest — I’m sure the member is familiar with those — and revegetate those. They can be…. It’s related, also, to the work on restoring the caribou popula- tion. They tend to be highways for predators for caribou. Those three programs, well received. The dormant well program, which was launched a couple of weeks ago, was oversubscribed by fivefold. The first traunch was $50 million, and there will be a second one going out in October of this year. Again, on relief for the stress cash flow of oil and gas companies.

We granted a one-time, one-year continuation of drilling licences and leases that were due to expire between June 1, 2020, and May 31, 2021. I think there are other…. Relief on the tax fund, which members, I’m sure, are familiar with. The proposed plan…. The April 1 carbon tax increase has been put on hold. The school tax was cut in half to provide the industri- al sector with savings. We extended the tax filing payment for the employer health tax. We directed B.C.

Hydro to allow major industries to defer 50 percent of their bill ini- tially for three months, and that program has been exten- ded for another three months. Dealing more directly with the member’s question and the relationship between CleanBC and the oil and gas sec- tor, the provincial government and the federal government signed a memorandum of understanding in 2019 which will provide $680 million for the electrification of the upstream. As the member will know, much of the upstream is powered by natural gas.

This agreement will begin the process of electrifying much of the infrastruc- ture in the oil and gas fields in British Columbia. I think that’s a very positive development and is consistent with the CleanBC goals that we’ve set out. The Chair:Thank you, Minister. I do see the Leader of the Third Party has arrived, and I understand there was an agreement he would start his questions now. If that works, I’ll turn it over to the Leader of the Third Party. A. Olsen:Mr. Chair, I’m prepared, if the member for Peace River South has a follow-up question to that….

I’m actually quite interested in the potential follow-up ques- tion that might be asked there. So I’ll cede the floor to him, if he’s got a question or two. Then I’ll just be listening for the answers. The Chair:Thank you, Member. M. Bernier:Thank you to the Leader of the Third Party. I’ll make it really quick, actually. We’ll get back to this later, and I don’t want to use up too much time. I am surprised…. Actually, I guess the positive thing I’ll say to the minister is…. He has read all of that into the record for the second or third time.

So when I get deep- er into questions later, he doesn’t have to repeat all that yet again, like he did yesterday. I am a little perplexed, though. When I asked about the economic recovery efforts and around CleanBC and his opinion, it took quite a while for him to find out from staff his opinion and then read out press releases. We’ll get into this a little bit later on. I’m sure the party after me probably has similar questions around CleanBC. If not, I’m sure it will be an important question. I’ll just let the minister know…. Hopefully, he doesn’t have to respond to this, and we can make better use of time.

When I get back, I’ll be asking around the carbon tax, around the Farmers Advocacy Office, around orphan wells, around domestic heating and possibly around a couple of projects by Coastal GasLink. That gives him a lot of heads-up. So hopefully, less time will be needed when we get into my questions. [10:05 a.m.] Hon. B. Ralston:I thank the member for his comments. The topics that he proposes to raise are noted. I look for- ward to those questions when they come. A. Olsen:Thank you to the previous members for the questions that they’re asking.

We’ve all got very short on time, so I’ve been instilled with confidence at the line of questioning that’s been asked here. We’re not all able to ask all the same questions over and over again, so I thank the members for their depth in getting to the bottom of this. I think a really important part of the budget estimates is the transparency and accountability in government, and I remain concerned with the lack of direct answers to the questions, even direct responses to the questions that are being asked. They’re important questions. They’re import- ant questions about the direction of our province.

They’re important questions about the future of our province. While we may have differences of opinion on how that is to be, the people of British Columbia deserve direct responses to the questions that are being asked. To my question. Minister, the oil and gas industry in B.C. is being pushed as an opportunity to create good-pay- ing jobs for rural and northern communities. However, we must be critical about how many jobs are stable, long-term opportunities and how many of them are actually avail- able to British Columbians.

As we move into our economic recovery, we must prioritize not just shovel-ready jobs but shovel-worthy ones. How many direct jobs are in the oil and gas industry 120 Committee of Supply,

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in B.C., and how many indirect jobs, such as construction services and accommodations? How many of these jobs are filled by British Columbians, and how many are filled by other Canadians and international workers? Just to note that these questions have been provided in advance to the ministry. [10:10 a.m.] Hon. B. Ralston:Thank you to the member for the question.

The Statistics Canada data that’s been provided to me says that 5,100 people were employed — these are direct employment — in the oil and gas sector in B.C., and 7,500 persons were employed in support activities for min- ing and for oil and gas extraction. In terms of major projects — there may be some interest to know about major projects — for LNG Canada, the total expected workforce at the end of June 2020, just last month, was 1,500 people. It’s estimated that about 50 per- cent of those are British Columbians.

As the member will be aware, under the Canadian Charter, there are mobility rights to every Canadian to travel throughout the province — although, perhaps, with COVID, that’s a little somewhat inhibited. That’s the number that’s provided to me. On Coastal GasLink, the total expected workforce at the end of June 2020 was 800, of which an estimated 75 percent are from British Columbia. In terms of any foreign workers, there don’t appear to be any at all. There are very few, if any. The only thing I would note about project labour force numbers is that they obvi- ously fluctuate as the project advances.

They’re currently in an expansion phase as they’re beginning to recover from COVID and advance those projects. I hope that’s something for the member. A. Olsen:Thank you to the minister for the response. The terms “person-years” and “job-years” have been used frequently in estimates for the number of jobs emer- ging from the development of B.C. oil and gas. Can the minister define these two terms on the record? Why is this term used over a direct estimate of part-time and full- time positions? What are the actual units of employment per person? How many people work in the sector, as an example? [10:15 a.m.] Hon.

B. Ralston:A “person-year” is defined as the amount of work done by a full-time individual or the equi- valent number of part-time individuals over the course of a year. It doesn’t represent the total number of people employed, which can be difficult to estimate due to job- sharing, shift work and turnover.

These questions on the composition of that workforce and the subsectors in which they work, as well as the typic- al duration of employment, are better directed to the min- ister responsible for Advanced Education, Skills and Train- ing, who is responsible for the labour market information office, from whence these

definitions come. A. Olsen:As of May 2019, the deep-well royalty credit program had in excess of $3.4 billion in unused credits available to qualified wells. What are the total accumulated natural gas deep-well credits available to companies in British Columbia for the past year? How many credits have been accessed by qualified companies? What are the total royalties that government has received since 2019? Hon. B. Ralston:The Ministry of Finance acts as the royalty collector and tabulates these figures as a part of the government’s audited public accounts each year.

For this year, the public accounts have not yet been released. There is an obligation to release the public accounts before August 31, 2020, for last year’s fiscal. To give you some context, the total outstanding deep- well credits available for reducing future natural gas royal- ties payable by March 31, 2018, was — and it’s a long num- ber here — $2,589,799,654.26. It’s rounded up as $2.59 bil- lion on the ’17-18 public accounts. For further context, in the following year, the total out- standing deep-well credits available for reducing future natural gas royalties payable by March 31, 2019, $2,621,872,311.41.

It’s rounded up to $2.622 billion on the 2018-19 public accounts. I acknowledge the member asked about the access — how much of those credits have been used. The staff is in the process of compiling and getting the number to me, which I’ll give to the member shortly. [10:20 a.m.] A. Olsen:Thank you. I’m not going to be able to get to all my questions. So as per what I stated yesterday, the full list of questions — well, the truncated full list of questions — that we have for the Minister of Energy, Mines and Pet- roleum Resources has been submitted. It would be great if we could get those responses as well.

As per the Intergovernmental Panel on Climate Change, the use of natural gas must decline by 15 percent by 2030 and 40 percent by 2050 — this is relative to 2020 — in order to limit warming to 1.5 degrees Celsius above pre- industrial levels. Market analysis backs up this need to slow our use of natural gas, as the falling cost of renewable energy, and this was largely the context of the conversation that was happening yesterday, makes sustainable options more available and the falling price of LNG puts the natur- al gas industry at a heightened risk for stranded assets.

At this point in time, we are faced with an unpre- cedented opportunity to invest in a greener economy that will support British Columbians long into the future as per targeted spending not only in shovel-ready but shovel-worthy jobs. A couple of questions here with respect to the LNG industry before I cede the floor to my colleagues in the Friday, July 10, 2020 Committee of Supply,

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official opposition. Is the minister and the ministry still considering the expansion of the LNG industry through the Kitimat LNG project? Can the minister please provide an updated status of construction for the LNG Canada project: what percentage of the project has been com- pleted, what’s the anticipated timeline, and how has COV- ID-19 affected construction of the project? [10:25 a.m.] Hon. B. Ralston:I thank the member for his question.

As the member may know, but it probably bears repeti- tion here, the province is supportive of the development of LNG and will ensure that British Columbians benefit from LNG projects by requiring proposals to meet our four stated conditions. Proposals must include express guaran- tees of jobs and training opportunities for British Colum- bians; must provide a fair return for our resource; must respect and make partners of First Nations; and must pro- tect our air, land and water, living up to our climate com- mitments.

The government considered all of those four conditions prior to determining whether to support the LNG Canada project. The owners of LNG Canada and their partners decided the project was feasible and proceeded with the largest private sector investment in Canadian history. Obviously, the project has been buffeted by the impact of COVID-19, but we are advised that they are on track to deliver LNG in 2025. A. Olsen:I didn’t get a response with respect to the oth- er…. I believe it’s a Chevron-owned project up there.

But anyway, I’m just moving on, because I’ve only got time for one more series of questions, again, which have been provided to the ministry. What is the total budgeted subsidy for LNG Canada? In other words, how much is the taxpayer on the hook for the LNG Canada project? What’s the market price for LNG that was used in determination of the feasibility of the project? What’s the current market price for LNG? Maybe the minister could provide some of the industry projections for the next year, five years, decade, going out into the future.

Then, once I get that response, I can cede the floor to friends in the official opposition. Thank you for the time, to the member for Kootenay East. [10:30 a.m.] Hon. B. Ralston:British Columbia put together a fiscal framework that was critical to the competitiveness of the LNG Canada project and supported the decision by its owners to proceed. The framework created opportunity for the province to enjoy significant employment and rev- enue opportunities that would not have been available had the project not gone forward.

When the LNG fiscal frame- work was announced, the government estimated the pro- vince would see $23 billion in direct revenues over the life of the project. The member has asked some questions about the pri- cing of LNG. Generally, the decision to proceed and the expectation of the future price, into the future, is some- thing that private proponents are…. It’s something that they take into calculation, making their decision about whether or not to invest. That’s totally a matter for them.

They have negotiated offtake agreements based on future production with partners, and that, again, is something that is within their purview. Those are negotiations that they engage in. The government doesn’t engage in those negotiations. E. Ross: Good morning to everybody on this Zoom conference call. My question to the minister is about pipeline blockades. I understand that the MOU that was signed in conjunction with the province as well as the federal government as well as the Hereditary Chiefs of the Wet’suwet’ en has got noth- ing to do with the blockades.

Basically, the MOU has to do with jurisdiction and, more notably, rights and title. My question to the minister is: is there a parallel process to resolve the blockade on the LNG Canada pipeline route, and if so, what are the results to date? [10:35 a.m.] Hon. B. Ralston:Thank you to the member for the question. Indeed, an MOU was signed. The Minister of Indigenous Relations was at the table with the federal min- ister and is fully conversant with all the details and the ongoing management of that particular relationship and relationships.

Those questions are better directed to him, given his knowledge and his intimate familiarity with the negotiation process. E. Ross: Y es, Minister, I understand the MOU was signed and the intentions of the MOU that was signed. My question was: is there a parallel conversation to resolve the pipeline blockade? Not talking about rights and title. Not talking about the issue with the Wet’suwet’ en Chiefs. I’m talking about the issue of a pipeline being blockaded from being built that’s fully permitted, that is following the law. That was my question.

So am I to understand that the Minister of Energy and Mines has no involvement in the dispute resolution of the pipeline blockade? Hon. B. Ralston:Thank you very much to the member for the question. I’m advised that currently there isn’t a blockade. So that’s the response that I’m able to give. E. Ross:That is not my understanding. The latest devel- opment I heard is that the Wet’suwet’ en have actually built a smokehouse on the right-of-way. Now, initially, when push came to shove, the Premier said that they had no 122 Committee of Supply,

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authorization to direct the RCMP to go in to actually clear out the blockade, which was partially true. [10:40 a.m.] The Union of B.C. Indian Chiefs as well as the civil liberties union have stated that in times of emergency, the Solicitor General can actually redirect the RCMP to be redeployed and cover the expenses of the RCMP redeploy- ing to enforce an injunction. In the case of this smoke- house being built on the right-of-way for the pipeline, will the minister be supporting the idea of the Solicitor Gen- eral reinvoking these powers to clear up the right-of-way?

This is actually a fully permitted pipeline, and they are fol- lowing the law. Hon. B. Ralston:The member has referred to a struc- ture in the right-of-way. I’m not sure that that in itself con- stitutes a blockade. I’m advised that it’s not impeding movement on the right-of-way at this time, but CGL has an injunction gran- ted to the company by the Supreme Court. If they are of the view that that structure is impeding their progress or their use of that right-of-way, they have the option, follow- ing the terms of the injunction, to speak with the RCMP and ask them to enforce the injunction. E.

Ross: To the minister, the question was: will the government repeat its initial action when the Solicitor General actually invoked

article 9 of the provincial police service agreement? That stipulated that in times of emergency, which was what the blockade was character- ized as, the provincial police service will be redeployed at the written request of the provincial minister, and the province will pay for the cost of the deployment. That was the question. Mainly, this is just to keep the word going that every- body has to follow the law. That’s what I suspect the Soli- citor General was trying to do. What I don’t see, though, was the general public understanding that the RCMP were actually doing two things.

They were actually following the injunction. As well, they were following the written request of the Solicitor General, under a provincial emer- gency act, to enforce the injunction. [10:45 a.m.] My only question was: is the government willing to be consistent with this exercise and to do it again in the event that more blockade tactics pop up, such as this structure that has been built in the right-of-way? Moving on, the minister mentioned previously, in his other answers, the fiscal framework that was developed for LNG Canada.

Now, this was a major incentive agreement that actually provided protections against rising carbon taxes in the future, as well as very favourable hydro rates, as well as protection against rising taxes over the next 20 years in terms of PST. Now, my question is: will this incentive package be applied to other projects, specifically Chevron’s project, KM LNG project, that wants to go with 100 percent elec- tricity, as well as other projects that might not be on such a large scale but actually offer more benefits to the LNG industry?

I’m talking about Olefins, out of Trout Lake, which is going to take what is characterized as the cleanest gas in the world, basically — LNG in B.C. — and make it even cleaner by taking out the heavy metals and actually trans- ferring that to a plastics plant and help develop plastics, Plexiglas and polymers for the air industry, the auto industry or any other industry that actually needs plastics.

I’m wondering if the Energy Minister is considering a comparable package for the Olefins projects that are on Trout Lake, if not an even greater package, because it’s actually addressing clean energy, manufacturing, employ- ment and economic benefits. [10:50 a.m.] Hon. B. Ralston:Thank you to the member for the question. The member has made reference to what I would describe as, and is entitled, the LNG investment fiscal framework. It is in existence and was previously announced. The member has made some reference to some of the attributes of that framework.

Any negotiations or prospective negotiations on any individual projects are not something that I would be able to answer at this time. For any further detail on that, the member would have to address questions to the Minister of Finance. E. Ross:Thank you, Minister. I will take it up with the Finance Minister. It’s quite surprising that the Energy Ministry has no comment or opinions on any of these projects that not only can help our economy but also help us get out of this crisis that COVID-19 has developed.

Everybody calls it a crisis, in terms of the economy, but nobody is willing to talk about what would get us out of it and what will actu- ally pay off the deficits and the debt that we’re incurring as a province and as a country. To that end, I’ll also presume that I’m going to take my next topic to the Finance Minister, in terms of Top Speed Energy, out of Terrace and Prince Rupert, that wants to ship LNG to Asia but also wants to actually transition all those remote communities in B.C. off diesel generation for electricity to LNG. Thank you to the minister for the questions, and thank you to the Chair.

I will now cease my questions. C. Oakes:Good morning to everyone. First, I would like to take a quick opportunity to, per- haps, acknowledge the incredible work that the Lhoosk’uz Dené, the Kluskus First Nation, has done over many years on working towards the Blackwater project. [10:55 a.m.] It is an incredibly important project for our region. I Friday, July 10, 2020 Committee of Supply,

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think, in the past, the minister hasn’t acknowledged the incredible work of the Kluskus First Nation. I want to do that on the record. The work that they have done has trans- formed many of our First Nations communities and the fact that we’ve got new training, development opportunit- ies — and really, an incredible opportunity for mining. I just wanted to put that on record. My question today is around the placer mining sector. It’s an incredibly important sector in British Columbia. It creates a significant amount of economic activity in many of our rural, remote communities.

For example, in Cari- boo North, and in some of our areas, we have over 400 active notices of work. It is estimated to contribute about $122 million into our community. As we look at economic recovery, diversification in our communities, placer is going to be, and is, an incredibly important part of eco- nomic recovery in British Columbia. My question to the minister is…. When we were in gov- ernment — the previous government — you could look at getting your notice-of-work permit, forward it and through the system in about 60 days. That’s what we were looking at for approval time.

Under the current government system of applications going through FrontCounter, the permits are now taking a minimum of 180 days for approval. For some of the more complicated applications, it can take up to 240 days to a year to reserve and receive your approval. Placer miners now can no longer make an application and work in the same year, with these horrendous delays, and it has a severe economic downturn, when we need to get these people up and working and contributing to our local eco- nomy and creating jobs.

Why is it taking so long to get notice of work, and why are permitting times increased to such significant time- lines that people can’t even expect to work in the same year as they’re putting in their permits? [11:00 a.m.] Hon. B. Ralston: The member has mentioned Lhoosk’uz Dené Nation. I certainly, if I haven’t, want to acknowledge the work that they’ve done in the region. The province already has an agreement with the Lhoosk’uz Dené Nation and the Ulkatcho Nation regard- ing an economic and community development agreement that would enable the sharing of the minimum tax revenue collected from Blackwater.

The title company is Artemis, which has made the investment of $200 million and is pro- ceeding to develop that particular mine. Certainly, those two nations will benefit. The agreement is already in place to make sure that they do. On the question of delays in receiving notices of work for placer miners, when I took over the ministry, the Pre- mier directed me to work on permitting delays. That’s something that I’m doing. The member has identified what I think would be fair to describe as a bottleneck, although I’m not sure that the times she gives are necessarily ones that I can agree with.

But certainly, there is a bottleneck there. That is being actively worked on. I hope to have some good news in the near future. D. Davies: Good morning, everyone. Good morning, Minister. One question. I wrote you a letter recently regarding a gravel pit located just north of Old Fort in Fort St. John, owned by Deasan Holdings. Of course, there are lots of questions and whatnot around that gravel pit, with the recent slide. But the fact remains that there’s been uncer- tainty for the residents of Old Fort, and uncertainty, cer- tainly, for the owner of gravel pit.

He’s under an evacuation order currently and has not been able to resume any oper- ations of the gravel pit. There is a thought, of course, that if he is able to mine in that gravel pit, that might be of benefit, actually, to the slide, by removing a lot of material that’s, of course, up top of the hill above Old Fort. I’m just wondering if the minister can give some idea around when Deasan Hold- ings might receive some word from the ministry regard- ing being able to resume operations or have some sort of an answer, some certainty, moving forward.

It’s been almost two years now, and the uncertainty, I think, is the biggest problem. [11:05 a.m.] Hon. B. Ralston:Sorry for the slight delay there. I was just asked for a copy of the letter that I did send to the MLA on May 1, 2020, regarding the Deasan Holdings gravel pit. The letter confirms that the chief inspector of mines has ordered an investigation of the landslide, and that is ongoing. The issues that are generated are geotechnical issues, understandably, and they’re complex.

That’s being re- viewed, and conclusions will be made available shortly. [11:10 a.m.] The Minister of Transportation and Infrastructure is also monitoring the slide area. My ministry is working with Deasan Holdings to determine if mining operations can resume, as that was an aspect of the MLA ’s question. That determination is in the process of being decided. M. Bernier:Thanks to my colleagues for their ques- tions so far. I’m going to jump back into a few things for the minister. I want to maybe go back to LNG for a second and some- thing that the minister commented on earlier. I’ll try to make this….

Again, not complicated, lengthy answers that will be needed. The minister, did I hear him correctly earlier when he said that approximately 50 percent of the employees work- ing for LNG Canada are British Columbians? Hon. B. Ralston:Y es. 124 Committee of Supply,

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M. Bernier:I just want to ask the minister, then, his thoughts on that. Of course, when he was in opposition, his opposition members, those that weren’t very publicly opposed to the project, those that were neutral said that if it went through, they would not settle for anything, really, less than 100 per- cent of the employees being British Columbians. I’m wondering if the minister thinks 50 percent of the employees being from B.C. is now a success as far as he’s concerned. Hon. B.

Ralston:As I recall the debate, the concern expressed was that first priority would be British Colum- bians, including members of Indigenous nations. Second priority would be other Canadians. Thirdly, if, and only if, there were no British Columbians nor Canadians available, then the company might have to resort to citizens of other countries. CGL has 75 percent. At this stage, LNG Canada has 50 percent. These numbers fluctuate. I’ve spoken with them in the past. I know they are making every effort to hire locally, and I think they’ve made best efforts.

I expect that number will increase as the project grows in size. M. Bernier:Well, thank you. First of all, I’m probably one of the loudest supporters of the oil and gas sector. I was a big supporter of LNG, to see it go forward. I remem- ber and recollect quite vividly the comments from this minister’s colleagues that, 100 percent, we need to ensure that it’s all British Columbians getting the jobs. Now, this is not a criticism of LNG Canada or Coastal GasLink. They’re doing their job, and I’m ecstatic that they’re bringing LNG to British Columbia.

But even prior to COVID, the oil and gas sector was seeing one of the worst unemployment records that they’ve seen in almost decades. The last 12, 18 months have been some of the worst on record for this sector. [11:15 a.m.] I guess my question to the minister, after his last com- ments…. I assume he’s saying, then, that 50 percent is sat- isfactory for him. But I’m wondering what his comment is to the other part of the population that could fill that 50 percent that are British Columbians who are unemployed right now, who are qualified and who are able to do that work.

What is he doing to advocate for those people who are unemployed right now? Hon. B. Ralston:The MLA has made some assump- tions in his question about what I’m saying is satisfactory. That’s not an assumption that I stated, nor do I share it. I think, initially, prior to COVID, one of the challenges at the site, certainly in Kitimat, was the tight labour mar- ket. Obviously, that has shifted and changed with COVID. Initially, a lot of the work would be clearing work. The more specialized oil and gas employment will be coming as the workforce and the nature of the work that the pro- ject is engaged in shifts.

The ministry has facilitated and helped set up job fairs, mostly focused on advising and making forest workers who are laid off aware of the opportunities in the sector. That’s through WorkBC. That has had some effect in mak- ing people aware of opportunities and making decisions to shift employment from out of the forest sector, which is experiencing some difficulties.

The member may also know that in the structure of the dormant well program, the $100 million financed in part- nership with the federal government, the stipulation was a very clear one that only B.C.-based companies, oil ser- vice companies located in British Columbia, could apply in the program for that work.

Obviously, given the proximity — the member will be intimately familiar with this — to Alberta, we were interested in employing B.C. companies and B.C. workers first, before citizens from Alberta. [11:20 a.m.] I do note that the federal government, in its agreement with Alberta, gave them $1 billion for a similar project. We figured they’re well supported there to hire Albertans on their side of the provincial border. Overall, I think we’ve…. Certainly, I share the senti- ments of the member that we want to see British Columbi- ans employed in what are good jobs that are ongoing.

We have made those efforts in conjunction with the company and with WorkBC to do that. M. Bernier:All due respect to the minister, he was read- ing out, basically, what the companies have done. I actually asked what the minister was doing to advocate for the oth- er 50 percent, for all of these people who, in British Col- umbia, are presently unemployed. It’s getting worse. Obviously, as the minister responsible for this sector…. The whole energy sector is seeing one of the worst times in history, as far as unemployment goes. We want to see leadership.

We want to see the minister standing up for all of these people who right now are qualified, who have the training and who could do the work. At one point — he’s right — there was a harder time to find employees, which is why we were standing up for more training to get people trained for these jobs. Now we have people who are trained who don’t have jobs, who are looking for support and leadership.

Let me just take it, on this same train for a second, upstream on the Coastal GasLink project — I just want to make the minister aware — and wonder what he’s doing, again, to advocate for British Columbian jobs and com- panies. As the minister probably knows, this is my back- ground. I worked for 25 years in the energy sector before becoming an MLA. Up in my area, under the Coastal GasLink, we have the new meter station and the Wilde Lake compressor site being built. I completely understand how procurement and job bidding processes go.

Is he aware that that job was let out to a firm based out Friday, July 10, 2020 Committee of Supply,

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of Toronto, not from British Columbia — a major project? At this time, I’m hearing from all of the British Columbi- an companies — in the Peace region, mostly, because that’s where they’re from — who were left out, who are not going to be working, right in their backyard, while a Toronto firm takes the work. Was he aware of that, and what are his thoughts on that? [11:25 a.m.] Hon. B. Ralston:I’m advised that Coastal GasLink has awarded approximately $900 million in contracts to local and First Nations businesses for right-of-way clearing, medical, security and camp management operations.

The contract that the member refers to I’m not familiar with. Perhaps he can provide me with more details about that. I just want to go back and talk a little bit more about the conditions on the dormant well program, because I think this illustrates the commitment of the government and myself as the minister to businesses in British Col- umbia. In the criteria for that program, only oil and gas field service companies and contractors based in British Col- umbia with registration offices and operations in British Columbia are eligible to apply for funding under those programs.

This is a required condition to be eligible, pre- cisely for the reason that the member sets out — to make sure that those opportunities come first to B.C. companies and B.C. workers. M. Bernier:I appreciate that. It’s unfortunate that the minister keeps rolling back to that answer for that specific project, which was federally funded. I want to touch on that in a second. He didn’t put those same requirements, onus and pressure for all of these other projects in the energy sector around British Columbia. Since he wants to continue to talk about the orphan well, actually, I have questions on it.

Maybe it will be quite simple, though. Can the minister again tell me how much funding was put forward for the orphan well reclamation project? I assume it’s broken down between federal and provincial. [11:30 a.m.] Hon. B. Ralston:The funding for the orphan well pro- gram — the dormant well program, as the member knows, is a separate program — is the $15 million raised by the levy, which was implemented in 2018, an additional $15 million from the federal government, out of that $120 mil- lion, and then $12 million from security that was held by the Oil and Gas Commission. That has been applied as well.

So a total of $42 million is available to deal with orphan wells in British Columbia this year. M. Bernier:Was there any money allotted out of the minister’s budget prior to the COVID announcements? Hon. B. Ralston:The levy is administered by the Oil and Gas Commission. It doesn’t come out of the ministry budget. It comes out of the commission budget. They col- lect the fee and administer it on behalf of government. M. Bernier:I heard some comments from the minister yesterday around the $5 billion of COVID funding approved by all parties. I’m just curious.

Since the minister keeps talking about how this was specifically oversubscribed and since this sector has one of the highest unemployment rates right now in the province…. Did the minister advocate to the Ministry of Finance for any extra funding at all to try to do more in this area — around the orphan wells, specifically — since he and his government have been advocating for so long that this is an important piece that needs to be dealt with? Hon. B. Ralston:Again, talking specifically about the orphan program. It was $1.4 million two years ago.

With the implementation of the levy, that money has increased to $15 million. It’s an industry-funded program. So that amount has increased. The additional $15 million from the federal government has been added and then the $12 mil- lion from security that’s available. In terms of a reaction to COVID, the member has spoken about the $5 billion that is available for recovery. Those decisions are being made at the moment.

There’s a window in which the public is being invited to make rep- resentations on that. [11:35 a.m.] I can detect from the tone and comments that the mem- ber is making that he’s making a pitch — and, I think, a valid one — that this sector be considered for a share of that further recovery money. I don’t know whether that will be the determination that will be made. As the minis- ter responsible, that’s something that I’ll take into account in any discussions that I have. I would say that the orphan well program has dramatically expanded from the time when he was in government. M.

Bernier:The minister is correct. I am advocating for that. If I was at the cabinet table, like I used to be, they’ d be hearing from me the importance, and the expectation is that this minister hopefully would do the same. Just one more question, if I can, because we’re going to run out of time, unfortunately, with the time we’ve been allotted to ask questions of this ministry. One more on this topic. The minister has really touted and highlighted that it’s B.C.-only companies working on the orphan well project.

I assume he’s aware, so I’m wondering what he’s doing to track the fact that it may not actually be as rosy as he said. A lot of companies that operate in British Columbia are from Alberta. That’s fair enough. A lot of them, though, as he said, can set up a box office or a small office in the 126 Committee of Supply,

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Peace region. They now can call themselves partly a B.C. company — even though their base might be in Edmon- ton, Calgary or somewhere else — and bid on all of these jobs in British Columbia. Is the minister saying, under the criteria that he’s set, that these companies, because they have a box office, then, in British Columbia, could have bid on these jobs, employed all of their people out of Alberta to do the work here?

What checks and balances did he put in place, prob- ably working with the Oil and Gas Commission, to ensure that those procurements went out to actual B.C. compan- ies and that B.C. families are benefiting from the work? Hon. B. Ralston:The member has asked the same ques- tions that I asked when we set up both the expansion of the orphan well program and the separate dormant well program. In the evaluation process, ministry staff had fol- lowed up independently and also with applicant compan- ies to verify registration, a B.C. office address and evidence for active operation and employees in B.C.

Further — and I think this addresses the member’s point directly — any newly B.C.-registered companies that applied to the program are being required to provide evid- ence of the employees that reside in B.C. and work out of their B.C. office. I share the member’s concern. Those are, I think, steps that are being taken to meet the concern that I share along with the member. M. Bernier:To the minister, hopefully he’s aware, espe- cially with the downturn right now, that this is really important.

The amount of people in the energy sector, under this government, who are deciding to move to Alberta to try to work is astounding. Again, obviously, we want to look for every opportunity to keep them here. [11:40 a.m.] I will make sure, as these companies and people have been complaining to myself and, I’m sure, the member for Peace River North as well…. He’s raised this issue as an important one. From what he’s hearing from his supply chain companies up there, obviously, they look for every opportunity. I’m going to switch for a second here to another topic.

This minister and government have been really trying to say that they’re looking for every opportunity to help people under the stresses, under COVID. I’m going to ask the minister if he has thought of this one. I’m going to give him an example. I’m going to look up a letter that I received from a senior in British Columbia, who showed me their natural gas bill. Now, their natural gas bill for two months was $98 in the commodity charge and $110 in carbon tax. Since the car- bon tax has been increased, their carbon tax is now more than the commodity itself.

Does the minister responsible for the natural gas sector think this is fair? Is there opportunity to, or has he advoc- ated to, possibly temporarily or permanently reduce car- bon tax off of domestic heating to help our seniors and vulnerable people in B.C.? [11:45 a.m.] Hon. B. Ralston:Thanks very much to the member for that question. The utility there in that region is Pacific Northern Gas, I believe. I recently met with the CEO and some of their team. I’m willing to meet with them again and take up that question with them on behalf of their customers. M.

Bernier: Well, that’s an interesting answer from the minister. It’s not the company’s decision to charge the carbon tax. It’s government telling them to charge the carbon tax. I’m sure when I’ve heard the amount of complaints that utility companies, whether it be Pacific Northern Gas or Fortis, in this other case…. They are the only two major ones operating in B.C. They’re being told to charge the car- bon tax. The amount of complaints they get about it…. I am sure they would love to take that off the bills, because they don’t make any money off of it. It’s remitted right back to government.

It’s unfortunate to hear that the minister actually hasn’t thought of this or advocated to the decision-makers — which, actually, he’s part of — to try and deal with this issue of the increased carbon tax that’s actually hurting families. I’ d say it’s mostly in rural B.C., but I don’t want to stereotypically align it just that way. I’m sure there are people in urban areas, too, that have high bills. I only have time for one more quick question, unfortu- nately. The minister is probably happy about that. I’ d love to dive into some of these a little bit more. Hopefully, this is an easy one for the minister.

This is one local to my area. Can he give me an update — I fore- shadowed it earlier — on where we are at with the Farmers Advocacy Office? If he indulges me just for a second. Obviously, under the previous government, it was co- funded between the Ministry of Energy and Mines and also with the local regional district to open an independ- ent advocacy office in the Peace region, where, of course, the majority of the oil and gas activity is. It was to allow and give supports for landowners and affected farmers, mostly, I’ d say, whose land was being impacted because of the oil and gas activity.

It gave them an independent voice to be able to go and get advice or support on how to deal with, work with, the oil and gas companies in the area. I’m sure the minister has been briefed on this, so I’m just curious if he can tell me where we are at on that. The fund- ing might have switched to a different ministry, but he can probably give me an update now of what his thoughts are and where we’re at on reopening. Then I’ll switch it over after that. Hon. B. Ralston:The member raises an interesting Friday, July 10, 2020 Committee of Supply,

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question. I can give him a little background here. In Febru- ary 2020, the Ministry of Energy, the Ministry of Agricul- ture and the Peace River regional district signed a memor- andum of understanding to establish and implement what is now called the Farmers’ Information Service. [11:50 a.m.] It’s a new program, building on the learnings from the previous service provided by the Farmers Advocacy Office. I’m sure the member is aware of that.

But just for the record, it’s designed to better assist farmers and other landowners in their understanding of the oil and gas development on their lands, reduce conflicts and maxim- ize benefits to both parties. It went out to tender once. No qualified bidder was identified during that process. It’s gone out again. It’s expected to be up and running in mid-to-late summer of this year. I think that’s where it’s at, so I’m looking forward to that office being open. T. Shypitka:Before we head into lunch here, I would just like to make a couple of comments before my next question to the minister.

The minister accused me earlier of being consistent with my questioning, which I found was…. That’s fine. I’ d also like to reply with: his answers are being very consistent. Even in the fact that the answers that were given to him three days in advance from the Green Party took the same amount of time as the questions that are on the fly from the members of opposition. This is why we’re going to be going longer than the allocated time that was allotted to us, and we will be returning after lunch with more questions.

But before we go, I’ll start hitting on, once again, the carbon tax and then on the cost structure that’s associated with it. On my last line of questioning, I talked about a couple of things. I went to the Ernst and Y oung report of 2018 that stated that our carbon pricing and our cost structure on carbon tax is the thing that makes us the least competitive. It’s the thing that puts us behind the eight ball more than any other factor there is. That was reflected in the same year report, 2018, of the Mining Jobs Task Force report. We can look further on other illustrations on how this is recognized.

The minister fails to really give it the credit that it’s due on how impactful it is on our competitiveness. There was a report in theProvince that said: “B.C. has the highest carbon tax in North America, with virtually no measures in place to offset any of the added cost borne by our natural resource and manufacturing industries. ” That was from an

article in theProvince. We can go to another quote here. This one is from the Business Council of British Columbia. They say: “Carbon pricing is supposed to raise the price of greenhouse gas emissions to encourage changes in behaviour, whether through a carbon tax or an emissions trading system, ETS. The problem for B.C., with its pure carbon tax, is that ETS always and without ex- ception provide a measure of protection to trade-exposed indus- tries by exempting some portion of their emissions from paying the price.

The B.C. carbon tax doesn’t offer such protection. ” These are the questions that I gave the minister earlier on recognizing the fact that we are behind the eight ball. We are falling farther and farther behind in our compet- itiveness. We’re not able to keep up with the rest of the world. We’re offering a great product, but if we can’t price ourselves in the market, we’ll never get that product out there. There has to be a balance somewhere. I want to illustrate a little bit more on what I mean by that — on payments to government. Now I’m going to slip into another couple of reports.

I’ve got reports all over the place. This is the PricewaterhouseCoopers report of 2017. They illustrate that the payments to government were: from 2015, $476 million; 2016, $650 million; 2017, $859 million. These are payments to government. Then in 2019, the ECG report here, the Pricewater- houseCoopers report 2019, came out with the latest statist- ics, and they noted that the payments to government were $884 million in 2017. [11:55 a.m.] There’s a little bit of a difference between that and the 2017 statement and the 2017 report due to actual num- bers. In 2018, it was $953 million, and 2019 was $1.057 billion.

So we’ve seen a dramatic increase in payments to government, yet we’ve seen a decrease in revenues by the industry. If you go back to the sameResilience and Opportunity in Uncertain Times report of 2019 by Pricewaterhouse- Coopers, on page 6 you’ll see gross mining revenues from 2017 of $11.7 billion, to $12.4 billion, to $11.4 bil- lion. Mining revenues went down about $275 million from 2017 to 2019, yet direct payments went up $173 million. This is where we’re starting to separate and become less competitive. The question, once again, to the minister….

I would encourage him to use the words “carbon tax” or “carbon cost structure” in his answer. Does he see this as being the number one hindrance to our global competitiveness? [12:00 p.m.] Hon. B. Ralston:I’m pleased to hear that we’re going to have an opportunity to continue this discussion after the break for lunch. What the member is talking about and has referenced, repeatedly, is competitiveness. It seems to be his thesis — and he’s cited a number of reports — that the carbon tax, in and of itself, is eroding British Columbia’s competitive- ness. I don’t….

Certainly, there is concern expressed about the carbon tax, but the way in which companies evaluate the com- petitiveness of investing in British Columbia is to look at the full array of taxes, regulatory environment, access to capital and to talent. One of the principal concerns that has been identified is the regulatory environment and the speed at which companies can get through the permitting 128 Committee of Supply,

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process. We’ve made a major commitment to accelerate that process in an orderly way. I’ve cited…. I don’t want to be accused of repeating myself, but companies have made recent decisions to invest in a major way in British Columbia, and to that extent, the market is speaking. So the premise that British Columbia’s competitive position is eroding is refuted by the actual business decisions made by mining companies to invest in British Columbia. The Chair:Thank you, Minister. As mentioned, it is the lunch hour. So if we could note the hour and move the motion, hon. Minister, we’ll go from there. Hon. B.

Ralston:Hon. Chair, I move that the commit- tee rise and report progress of the estimates of the Ministry of Energy, Mines and Petroleum Resources. Motion approved. The Chair:Thank you, Members. We will see you after the lunch break. This meeting is now adjourned. The committee adjourned at 12:04 p.m. Friday, July 10, 2020 Committee of Supply,

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Collection	British Columbia — Debates (Hansard)
Citation	20200710am CommitteeC n7
Type	hansard
Volume / chapter	20200710am CommitteeC n7
Language	en
Format	pdf
Source	PROVINCIAL
Identifier	d0b8fbdad07746323e954ac299a83fcba9380f9d

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